Question 1

In the 1960s the Council of Economic Advisers determined that the acceptable level of unemployment that would be used in determining full employment was

Accepted Answer

A) 5.5 percent. 
B) 5 percent. 
C) 4.5 percent. 
D) 4 percent. 
A) 5.5 percent. 
B) 5 percent. 
C) 4.5 percent. 
D) 4 percent.

Question 2

Frictional unemployment stems from an insufficient level of demand in the economy.

Accepted Answer

A) True 
 B)False

Question 3

Full employment means everyone in the labor force has a job.

Accepted Answer

A) True 
 B)False

Question 4

Suppose the working-age population of Country A is 200 million,the number employed is 130 million,and the number unemployed is 10 million.What is the labor force participation rate?

Accepted Answer

A) 60 percent. 
B) 70 percent. 
C) 65 percent. 
D) 75 percent. 
A) 60 percent. 
B) 70 percent. 
C) 65 percent. 
D) 75 percent.

Question 5

In the early stages of a recession,what type of unemployment gets larger?

Accepted Answer

A) Frictional. 
B) Structural. 
C) Cyclical. 
D) Seasonal. 
A) Frictional. 
B) Structural. 
C) Cyclical. 
D) Seasonal.

Question 6

Part-time workers who desire full-time employment are

Accepted Answer

A) Underemployed and contribute to the unemployment statistic. 
B) Underemployed but do not contribute to the unemployment statistic. 
C) Not part of the labor force and do not contribute to the unemployment statistic. 
D) Discouraged workers and contribute to the unemployment statistic. 
A) Underemployed and contribute to the unemployment statistic. 
B) Underemployed but do not contribute to the unemployment statistic. 
C) Not part of the labor force and do not contribute to the unemployment statistic. 
D) Discouraged workers and contribute to the unemployment statistic.

Question 7

Suppose a student graduates from college with a civil engineering degree and is now employed to grade papers,answer the phone,and make copies-tasks that are below the graduate's capabilities.The graduate can best be classified as

Accepted Answer

A) A discouraged worker. 
B) Structurally unemployed. 
C) Phantom unemployed. 
D) Underemployed. 
A) A discouraged worker. 
B) Structurally unemployed. 
C) Phantom unemployed. 
D) Underemployed.

Question 8

Explain how discouraged workers either overstate or understate the unemployment problem.

Accepted Answer

Discouraged workers are those who would

Question 9

The type of unemployment that economists generally associate with normal growth of the labor force and expanding job opportunities in a dynamic economy is

Accepted Answer

A) Frictional unemployment. 
B) Seasonal unemployment. 
C) Cyclical unemployment. 
D) Structural unemployment. 
A) Frictional unemployment. 
B) Seasonal unemployment. 
C) Cyclical unemployment. 
D) Structural unemployment.

Question 10

When jobs are outsourced,

Accepted Answer

A) Unemployment increases significantly. 
B) Corporations lose money. 
C) The economy begins to collapse. 
D) Production possibilities expand. 
A) Unemployment increases significantly. 
B) Corporations lose money. 
C) The economy begins to collapse. 
D) Production possibilities expand.

Question 11

Unemployment was fairly low during

Accepted Answer

A) The Great Depression. 
B) World War II. 
C) The 1930s. 
D) The recession of 1981 
A) The Great Depression. 
B) World War II. 
C) The 1930s. 
D) The recession of 1981

Question 12

For the labor force to definitely increase,

Accepted Answer

A) There must be an increase in total population. 
B) There must be an increase in immigration. 
C) People must turn from being discouraged workers into people actively seeking employment. 
D) None of the choices are correct. 
A) There must be an increase in total population. 
B) There must be an increase in immigration. 
C) People must turn from being discouraged workers into people actively seeking employment. 
D) None of the choices are correct.

Question 13

If more teenagers stay in school longer rather than dropping out and entering the labor force,

Accepted Answer

A) The production possibilities curve shifts outward. 
B) The production possibilities curve shifts inward. 
C) The number of discouraged workers increases. 
D) The unemployment rate goes up. 
A) The production possibilities curve shifts outward. 
B) The production possibilities curve shifts inward. 
C) The number of discouraged workers increases. 
D) The unemployment rate goes up.

Question 14

When people over 16 years old start looking for jobs,the

Accepted Answer

A) Unemployment rate increases and the labor force increases. 
B) Unemployment rate decreases and the labor force decreases. 
C) Unemployment rate increases and the labor force decreases. 
D) Unemployment rate decreases and the labor force increases. 
A) Unemployment rate increases and the labor force increases. 
B) Unemployment rate decreases and the labor force decreases. 
C) Unemployment rate increases and the labor force decreases. 
D) Unemployment rate decreases and the labor force increases.

Question 15

Table 6.4: Population and Employment in Nationland $\begin{array}{|l|r|r|r|}
\hline&1999&2000&2001\
\hline \text { Working Age Population } & 100 & 110 & 125 \
\hline\text { Employed } & 65 & 70 & 80 \
\hline\text { Unemployed } & 5 & 10 & 20 \
\hline \text { Discouraged Workers } & 2 & 3 & 5 \
\hline
\end{array}$ 
 *all numbers are in millions
What was the unemployment rate in Nationland in 1999?

Accepted Answer

A) 7.6 percent. 
B) 7.1 percent. 
C) 5.0 percent. 
D) 65.0 percent. 
A) 7.6 percent. 
B) 7.1 percent. 
C) 5.0 percent. 
D) 65.0 percent.

Question 16

When the economy is below full employment,it is producing

Accepted Answer

A) On the production possibilities curve. 
B) Beyond the production possibilities curve. 
C) Inside the production possibilities curve. 
D) None of the choices are correct. 
A) On the production possibilities curve. 
B) Beyond the production possibilities curve. 
C) Inside the production possibilities curve. 
D) None of the choices are correct.

Question 17

Outsourcing is the

Accepted Answer

A) Unemployment that is inevitable when jobs leave a country. 
B) Relocation of production from domestic companies to foreign countries. 
C) Loss of output because of an increase in unemployment. 
D) Movement of workers to foreign countries where there are more jobs. 
A) Unemployment that is inevitable when jobs leave a country. 
B) Relocation of production from domestic companies to foreign countries. 
C) Loss of output because of an increase in unemployment. 
D) Movement of workers to foreign countries where there are more jobs.

Question 18

Which of the following is considered a discouraged worker?

Accepted Answer

A) A professional football player who is forced to play a new position. 
B) A professional football player who gets cut after the preseason schedule has been completed. 
C) A professional football coach coming off a 0 win season. 
D) A retired professional football player who tried to make a comeback but found no one was willing to give him a tryout,so he no longer looks for a job. 
A) A professional football player who is forced to play a new position. 
B) A professional football player who gets cut after the preseason schedule has been completed. 
C) A professional football coach coming off a 0 win season. 
D) A retired professional football player who tried to make a comeback but found no one was willing to give him a tryout,so he no longer looks for a job.

Question 19

The labor force participation rate is the number

Accepted Answer

A) Of unemployed divided by the number of employed. 
B) Of employed divided by the number in the labor force. 
C) Of employed divided by the total population. 
D) In the labor force divided by the working-age population. 
A) Of unemployed divided by the number of employed. 
B) Of employed divided by the number in the labor force. 
C) Of employed divided by the total population. 
D) In the labor force divided by the working-age population.

Question 20

What was the unemployment rate in 2004 in Table 6.1? Table 6.1
$\begin{array}{|l|r|r|r|}
\hline& 2004 & 2005 & 2006 \
\hline \text { Working Age Population } & 200 \text { million } & 225 \text { million } & 275 \text { million } \
\hline \text { Labor Force } & 150 \text { million } & 165 \text { million } & 200 \text { million } \
\hline\text { Unemployed } & 5 \text { million } & 15 \text { million } & 35 \text { million } \ 
\hline
\end{array}$

Accepted Answer

A) 3.9 percent. 
B) 75 percent. 
C) 3.3 percent. 
D) 2.5 percent. 
A) 3.9 percent. 
B) 75 percent. 
C) 3.3 percent. 
D) 2.5 percent.

Exam 6: Unemployment

In the 1960s the Council of Economic Advisers determined that the acceptable level of unemployment that would be used in determining full employment was

Frictional unemployment stems from an insufficient level of demand in the economy.

Full employment means everyone in the labor force has a job.

Suppose the working-age population of Country A is 200 million,the number employed is 130 million,and the number unemployed is 10 million.What is the labor force participation rate?

In the early stages of a recession,what type of unemployment gets larger?

Part-time workers who desire full-time employment are

Suppose a student graduates from college with a civil engineering degree and is now employed to grade papers,answer the phone,and make copies-tasks that are below the graduate's capabilities.The graduate can best be classified as

Explain how discouraged workers either overstate or understate the unemployment problem.

The type of unemployment that economists generally associate with normal growth of the labor force and expanding job opportunities in a dynamic economy is

When jobs are outsourced,

Unemployment was fairly low during

For the labor force to definitely increase,

If more teenagers stay in school longer rather than dropping out and entering the labor force,

When people over 16 years old start looking for jobs,the

Table 6.4: Population and Employment in Nationland 1999 2000 2001 Working Age Population 100 110 125 Employed 65 70 80 Unemployed 5 10 20 Discouraged Workers 2 3 5 *all numbers are in millions What was the unemployment rate in Nationland in 1999?

When the economy is below full employment,it is producing

Outsourcing is the

Which of the following is considered a discouraged worker?

The labor force participation rate is the number

What was the unemployment rate in 2004 in Table 6.1? Table 6.1 2004 2005 2006 Working Age Population 200 million 225 million 275 million Labor Force 150 million 165 million 200 million Unemployed 5 million 15 million 35 million

Economics: the Core Issues

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Theory Versus Reality

Consumer Choice

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